Best method for validating strategy?

magd36

As I’m entering retirement I’ve realised I’m generally a low risk capital preservation investor rather than a growth investor. I’ve found the typical annual cost of 0.75% of total fund value that IFA’s charge for changing or setting up investments, wipe out any small gains. This means the picking of funds, percentage allocations and rebalancing is down to me as well as what to withdraw from and when (cash, pension & general investments). I’m reading and listening to podcasts as well as checking what AI chatbots are saying. I’d like a professional to review the setup and advise. I can take the action, but there seems to be little interest if there’s no ongoing charges. What’s my best options. Thanks.

cfw1994

You can always post something of a sanitised detail here.
A fair amount of knowledge on this forum…..although we are just a bunch of strangers on the internet, so nothing is promised or guaranteed…

magd36

cfw1994 said:

You can always post something of a sanitised detail here.
A fair amount of knowledge on this forum…..although we are just a bunch of strangers on the internet, so nothing is promised or guaranteed…

I’ll have to think about how to structure the post to make it meaningful in a generalised manner. Thanks.

LHW99

Have you spoken to pensionwise?

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Not advice, but they will help clarify things like what options you can consider for how to withdraw money, and will explain any terminology you might not be clear on.

Aylesbury_Duck

I've found AI to be very helpful in "validating" my plans.  I've had some incredibly detailed responses to my detailed questions, and while I don't take them as advice to be followed absolutely, I have found them helpful in challenging my assumptions and thinking.  Over the last few weeks I've settled on a balance of funds and risks for pensions and investments, largely driven by AI and wider reading its outputs have led me to pursue.  Although I'm 5+ years from retiring, it's even suggested a strategy for withdrawals which seems to make sense when cross-checking it.

Bostonerimus1

Your starting point should be a budget to see how much income you need. Then write down your "guaranteed" income streams, ie annuities, pensions, SP etc. With those numbers in hand you can start to think about a portfolio to cover any income gap and a drawdown strategy. It doesn't need to be complicated and might be a combination of a few index trackers, investment trusts, cash and an annuity.

magd36

Bostonerimus1 said:

Your starting point should be a budget to see how much income you need. Then write down your "guaranteed" income streams, ie annuities, pensions, SP etc. With those numbers in hand you can start to think about a portfolio to cover any income gap and a drawdown strategy. It doesn't need to be complicated and might be a combination of a few index trackers, investment trusts, cash and an annuity.

I’ve already done that. The validation I’m looking for is how/when I should withdraw from cash, investments and pensions as well as the funds and allocation of money within those funds based on my withdrawal plan and low risk attitude (with marginally higher risk for investments I’m unlikely to need within the next 8 years).  Tax efficiency is also important to me. With bonds proving not to be as robust as once thought after 2022 it spooks me. Suggestions for low risk are now around short term bonds and money markets but it’s just getting more complicated. Thanks

dunstonh

. I’ve found the typical annual cost of 0.75% of total fund value that IFA’s charge for changing or setting up investments, wipe out any small gains. 

The diminant figure is actually 0.5%.    Its smaller values where 0.75%-1.00% is used.   

 but there seems to be little interest if there’s no ongoing charges.

Advice would be different for a transactional client compared to an ongoing client.    Plus, the advice cost would be subject to VAT if you want it, but not with an ongoing client.

 With bonds proving not to be as robust as once thought after 2022 it spooks me.

Nov 2021 to October 2023 effectively unwound the bubble that had built up post credit crunch due to quantitative easing.  They are now back in the ballpark of their long-term average.

Suggestions for low risk are now around short term bonds and money markets but it’s just getting more complicated. 

This is why platforms are starting to introduce fixed-term annuities "on platform" as these can be used to provide some of the defensive assets coverage.  It's early days on the intermediary side and will probably be non-existent on the DIY side but it may suit some people.    On the DIY side, some are buying direct defensive assets, i.e. gilts rather than gilt funds.

magd36

dunstonh said:

. I’ve found the typical annual cost of 0.75% of total fund value that IFA’s charge for changing or setting up investments, wipe out any small gains. 

The diminant figure is actually 0.5%.    Its smaller values where 0.75%-1.00% is used.   

 but there seems to be little interest if there’s no ongoing charges.

Advice would be different for a transactional client compared to an ongoing client.    Plus, the advice cost would be subject to VAT if you want it, but not with an ongoing client.

 With bonds proving not to be as robust as once thought after 2022 it spooks me.

Nov 2021 to October 2023 effectively unwound the bubble that had built up post credit crunch due to quantitative easing.  They are now back in the ballpark of their long-term average.

Suggestions for low risk are now around short term bonds and money markets but it’s just getting more complicated. 

This is why platforms are starting to introduce fixed-term annuities "on platform" as these can be used to provide some of the defensive assets coverage.  It's early days on the intermediary side and will probably be non-existent on the DIY side but it may suit some people.    On the DIY side, some are buying direct defensive assets, i.e. gilts rather than gilt funds.

Before I comment, can I ask how you split the original quote and answer in sections? This would be really helpful. I can use the quote feature but lose the format if I answer between sections.

Thanks

Bostonerimus1

magd36 said:

Bostonerimus1 said:

Your starting point should be a budget to see how much income you need. Then write down your "guaranteed" income streams, ie annuities, pensions, SP etc. With those numbers in hand you can start to think about a portfolio to cover any income gap and a drawdown strategy. It doesn't need to be complicated and might be a combination of a few index trackers, investment trusts, cash and an annuity.

I’ve already done that. The validation I’m looking for is how/when I should withdraw from cash, investments and pensions as well as the funds and allocation of money within those funds based on my withdrawal plan and low risk attitude (with marginally higher risk for investments I’m unlikely to need within the next 8 years).  Tax efficiency is also important to me. With bonds proving not to be as robust as once thought after 2022 it spooks me. Suggestions for low risk are now around short term bonds and money markets but it’s just getting more complicated. Thanks

So how much income do you need to generate and for how long from what size pension pot?

QrizB

magd36 said:

Before I comment, can I ask how you split the original quote and answer in sections? 

Quote the same post several times, editing the quoted text and inserting your responses into the flow.

magd36 said:

This would be really helpful. I can use the quote feature but lose the format if I answer between sections.

It takes a little bit of work and can be tricky on a phone but is easier on laptop/desktop.